Businessweek Archives

Don't Let an Employee's Poor Performance Compromise Your Business

May 30, 2006

When small-business owners find themselves dealing with an employee whose performance has deteriorated, they often don’t have the resources in place to effectively deal with the situation or to protect themselves against litigation.

Clearly defined expectations and early intervention can save small-business owners time and stress, and help decrease the chances that a minor employee problem will snowball into a major complication for their business. Here are three simple steps to follow that will, in the long run, improve employee performance, increase morale, and protect against potentially costly litigation.

1. Explain the obvious. From the start, employees must understand what behavior is expected of them. Outlining what is acceptable and unacceptable behavior provides business owners the framework with which to evaluate an employee’s performance and provide discipline if necessary. Most important, the code of conduct needs to be followed by the business owners and managers.

2. Evaluate employees regularly. Written documentation of specific employee misbehavior (like absence or tardiness) is the best defense against discrimination claims. Often managers who aren’t comfortable with criticism give employees higher marks than they deserve. Be honest and resist the temptation to hide bad news.

3. Early intervention. Be proactive. In almost every circumstance, termination shouldn’t be a surprise. It should be a culmination of progressive discipline that has given employees the clear signal that they have not been performing up to your expectations.